How to Generate e-Invoices for RCM Self-Invoices (RCMDOM and RCMIMP): Covered Supplies, Eligible Recipients and Key Compliance Issues

RCMIMP applies to import of services, that is, a supply where the supplier is located outside India, the recipient is located in India and the place of supply is in India (Section 2(11) of the IGST Act). Tax is payable by the recipient under Section 5(3) of the IGST Act read with entry 1 of Notification No. 10/2017–Integrated Tax (Rate), which covers services supplied by a person in a non-taxable territory to a person in the taxable territory other than a non-taxable online recipient. Common examples are consultancy, legal and audit fees paid abroad; software, cloud and other online subscriptions taken for business; royalty and licence fees; and management fees and cost recharges from overseas group entities. Import of services from a related person or from an establishment outside India is a supply even without consideration under paragraph 4 of Schedule I, and is equally within RCMIMP.

2.3 What Is Not Covered

• Inward supplies from registered suppliers, even where tax is payable under reverse charge; the supplier issues the invoice.
• Supplies from unregistered persons that are not notified for reverse charge; Section 9(4) applies only to the notified class of recipients and supplies.
• Import of goods, on which IGST is levied with customs duty under the Customs Tariff Act.
• Supplies on which an electronic commerce operator pays tax under Section 9(5).
• Payment vouchers under Section 31(3)(g); the advisory covers only self-invoices.

3. Which Recipients Must Use the Facility

The advisory confines the facility to “eligible and active registered recipients” with Aggregate Annual Turnover (AATO) of ₹5 crore and above, which is the present e-invoicing threshold under Notification No. 13/2020–Central Tax as amended by Notification No. 10/2023–Central Tax with effect from 01.08.2023. The following points determine who will be covered:

• Threshold test: As under the existing e-invoicing regime, the test is AATO on a PAN basis of ₹5 crore or more in any preceding financial year from 2017-18 onwards.
• Registration-wise compliance: Each GSTIN, being a distinct person, will issue and report self-invoices for the supplies it receives.
• Active registration: A recipient whose registration is suspended or cancelled will not be able to generate an IRN.
• Entities exempt from e-invoicing: Paragraph 2 of Notification No. 13/2020–Central Tax, as amended, exempts SEZ units, insurers, banking companies, financial institutions including NBFCs, GTAs, suppliers of passenger transportation, suppliers of admission to cinematograph films in multiplex screens, and Government departments and local authorities. That exemption is framed for their outward invoices. Whether they will have to e-invoice their self-invoices will depend on the wording of the new notification.
• Below-threshold and composition taxpayers: These recipients are outside the facility. They continue to issue self-invoices outside the IRP.

4. How to Generate the e-Invoice: Step by Step

Field-level details will be prescribed in the NIC IRP-1 release note, which has not yet been issued. The sequence below reflects the advisory and the existing law.

1. Step 1 – Identify the transaction. Confirm that the supply is notified for reverse charge, that the supplier was unregistered (or registered only for TDS) on the date of receipt, and that your AATO is ₹5 crore or more.
2. Step 2 – Determine time of supply, place of supply and tax head. Fix the period of liability, the place of supply and whether IGST or CGST plus SGST applies (Part 5 below).
3. Step 3 – Prepare the self-invoice. Issue it within thirty days of receipt (Rule 47A), with the particulars required by Rule 46, a separate serial number series, and a statement that tax is payable on reverse charge.
4. Step 4 – Report it on an IRP. Through any of the six authorised IRPs, using API integration (direct or through a GSP, ASP or ERP) or the IRP’s own tools as they are made available, select supply type RCMDOM or RCMIMP and enter the supplier details, line items, HSN or SAC, taxable value, rate and tax.
5. Step 5 – Obtain the IRN and QR code. On successful validation the IRP returns the IRN and a signed QR code. Print the QR code on the self-invoice and retain the signed data.
6. Step 6 – Pay the tax and report in GSTR-3B. Pay the tax in cash in Table 3.1(d) of GSTR-3B for the period in which the time of supply falls. Claim input tax credit in Table 4(A)(2) for import of services, or Table 4(A)(3) for other reverse charge supplies, subject to Sections 16 and 17.
7. Step 7 – Issue the payment voucher. At the time of payment, issue a payment voucher under Section 31(3)(g) and reconcile it with the self-invoice.

5. Precautions and Key Issues

5.1 Supplier’s Registration Status on the Date of Receipt

The test is applied on the date of receipt of the goods or services. Verify the supplier’s status on the GST portal and keep a record of the search. A supplier registered only for deducting tax under Section 51, such as a Government department, is treated as unregistered for this purpose. Do not self-invoice a supply from a registered supplier. Doing so creates a second invoice for the same supply, exposes the credit to challenge and may lead to tax being paid twice.

5.2 Notified Reverse Charge Entry

Map each inward supply to the precise entry of Notification No. 4/2017–Central Tax (Rate), 13/2017–Central Tax (Rate), 07/2019–Central Tax (Rate) or 10/2017–Integrated Tax (Rate), including any conditions about the class of supplier or recipient. Several entries apply only where the recipient is a registered person or a body corporate, or exclude composition taxpayers. A supply from an unregistered person that matches no entry attracts no reverse charge and needs no self-invoice.

5.3 Time of Supply

Services: Under Section 13(3) of the CGST Act, as amended with effect from 01.11.2024, the time of supply is the earliest of the date of payment and, where the recipient is to issue the invoice, the date of issue of that invoice. The sixty-day rule in clause (b) applies only where the supplier issues the invoice. If neither date can be determined, the time of supply is the date of entry in the recipient’s books. For services imported from an associated enterprise, it is the date of entry in the books or the date of payment, whichever is earlier.

Goods: Under Section 12(3), the time of supply is the earliest of the date of receipt of goods, the date of payment, and the date immediately after thirty days from the supplier’s invoice. Since an unregistered supplier usually issues no invoice, the date of receipt or the date of payment will ordinarily govern.

The self-invoice date and the time of supply are therefore not always the same. Circular No. 211/5/2024–GST dated 26.06.2024 clarifies that a recipient who issues the self-invoice late must pay interest on the delayed tax and may face penal action under Section 122.

5.4 Time Limits for Issuing and Reporting the Self-Invoice

Rule 47A requires the self-invoice within thirty days of receipt of the supply. Separately, taxpayers with AATO of ₹10 crore and above currently cannot report an e-invoice on the IRP more than thirty days after the document date. If that restriction is extended to the new supply types, the self-invoice will have to be issued and reported promptly, because a document missed on the IRP may not be reportable later.

5.5 Place of Supply

Goods: Under Section 10(1)(a) of the IGST Act, the place of supply is where the movement of goods terminates for delivery to the recipient.

Domestic services: Under Section 12 of the IGST Act, the general rule for a registered recipient is the recipient’s location (Section 12(2)(a)). Specific rules override it. For renting of immovable property, the place of supply is where the property is located (Section 12(3)). For GTA services to a registered person, it is the location of that person (Section 12(8)).

Import of services: Section 13 of the IGST Act applies. Confirm that the place of supply is in India. Services performed on goods physically located outside India, or services connected with an event held outside India, may have their place of supply outside India. Such a service is not an import of services and attracts no reverse charge.

5.6 Inter-State or Intra-State: Choice of Tax Head

For RCMDOM, compare the location of the supplier with the place of supply under Sections 7 and 8 of the IGST Act. For an unregistered supplier, the location is its fixed establishment or usual place of residence (Section 2(15) of the IGST Act). If both are in the same State or Union territory, CGST and SGST or UTGST apply; otherwise IGST applies. For example, legal services by an unregistered advocate in Delhi to a company registered in Maharashtra have their place of supply in Maharashtra and attract IGST. In renting cases, check where the landlord supplies from and where the property is located before fixing the tax head.

For RCMIMP, Section 7(4) of the IGST Act deems every import of services to be an inter-State supply, so IGST alone applies.

If tax is paid under the wrong head, the correct tax must be paid. The amount wrongly paid can be refunded under Section 77 of the CGST Act or Section 19 of the IGST Act, within the time allowed by Rule 89(1A). An IRN generated with the wrong tax head should be cancelled on the IRP within the time allowed and a fresh self-invoice reported.

5.7 Valuation

The value is the transaction value under Section 15 of the CGST Act. It includes the full consideration payable, including incidental charges and amounts the supplier recovers from the recipient. It is the gross amount before deduction of income tax at source, not the net amount remitted. Where the recipient bears foreign withholding tax on the supplier’s behalf, the amount so borne forms part of the consideration.

5.8 Exchange Rate for Import of Services

Convert foreign currency consideration at the rate applicable under Rule 34(2) of the CGST Rules on the date of time of supply under Section 13. Applying the rate of the remittance date or the invoice date where these differ from the time of supply is a common source of error.

5.9 Import of Services from Related Persons

Value supplies between related persons under Rule 28 of the CGST Rules. Circular No. 210/4/2024–GST dated 26.06.2024 clarifies that where the recipient is eligible for full input tax credit, the value declared in the invoice may be deemed the open market value, and where no invoice is issued, the value may be deemed nil. Recipients who rely on the nil-value position should examine how it sits with the self-invoicing obligation under Section 31(3)(f) and the forthcoming e-invoicing requirement.

5.10 Rate of Tax and HSN or SAC

Apply the rate in force on the date of time of supply. For services, the rate is the one prescribed for the service itself and not a reverse charge rate. Report HSN or SAC at the length prescribed by Notification No. 78/2020–Central Tax, which is six digits for taxpayers with AATO above ₹5 crore. An incorrect code or rate will be visible on the IRP record and cannot be amended after the IRN is generated.

5.11 Invoice Particulars and Numbering

The self-invoice must contain the particulars in Rule 46, including the supplier’s name and address, the place of supply and a statement whether tax is payable on reverse charge. Use a consecutive serial number unique for the financial year and not exceeding sixteen characters. A separate series for self-invoices avoids clashes with outward invoices on the IRP. Issue a separate self-invoice for each supplier.

5.12 Payment of Tax in Cash

Tax payable on reverse charge is excluded from “output tax” under Section 2(82) of the CGST Act. It therefore cannot be paid from the electronic credit ledger under Section 49(4) and must be paid in cash. The advisory does not say whether IRN data for RCMDOM and RCMIMP will auto-populate any return. Until GSTN clarifies this, continue to compute and report the liability in GSTR-3B yourself.

5.13 Input Tax Credit

Credit is available only after the tax is paid and subject to Sections 16 and 17. Under Circular No. 211/5/2024–GST, the time limit in Section 16(4) for such supplies runs from the financial year in which the recipient issues the self-invoice. Tax remains payable even where credit is blocked under Section 17(5), and credit used for exempt or non-business purposes must be reversed under Rules 42 and 43.

5.14 Advances and Payment Vouchers

For services, a payment made before receipt fixes the time of supply on the date of payment and requires a payment voucher under Section 31(3)(g). The self-invoice follows on receipt of the supply. Track advances so that tax is not paid twice, once on the advance and again on the self-invoice.

5.15 Cancellation, Amendment and Credit or Debit Notes

Under the present IRP framework, an IRN can be cancelled within 24 hours of generation but cannot be amended. The advisory does not say whether credit and debit notes against RCMDOM and RCMIMP self-invoices will be reportable. Check the NIC IRP-1 release note before setting correction procedures.

5.16 Consequences of Not Obtaining the IRN

Once the requirement is notified, Rule 48(5) may apply, under which an invoice required to be e-invoiced but issued without an IRN is not treated as a valid invoice. That would affect the documentary basis for input tax credit and could attract penalty under Section 122. Until the notification is issued, generating IRNs for self-invoices is optional, but the self-invoice itself is not.

5.17 Systems and Vendor Master Readiness

Flag every vendor in the ERP as registered, unregistered, registered only for TDS, or located outside India. Map items and services to their reverse charge entries. Set up automatic generation of self-invoices within the Rule 47A period, and test the RCMDOM and RCMIMP flows in the IRP sandbox. Watch for the GSTN–IRP webinar and the release note announced in the advisory.

6. Conclusion

RCMDOM and RCMIMP bring onto the IRP a class of documents that many businesses have so far prepared informally. The change adds no new tax liability. It does, however, put every reverse charge self-invoice on a time-stamped government record, so the time of supply, place of supply, tax head, valuation and exchange rate will need to be right when the invoice is issued. Taxpayers above the threshold should use the sandbox period to clean up vendor masters and RCM mapping, and should track the notification that will make the requirement effective.

Disclaimer: Prepared by Team GSTIndiaguide.com. This summary is for information and does not constitute legal advice.  Refer to original notification, judgement, circular or other documents for reference.